Can a consumer take you, the service provider, to court because they did not understand some of the terms and conditions of your signed contract? Beware, the answer is Yes!

From April 2011 the Consumer Protection Act came into full effect with the result that it is now against the law to use difficult-to-understand language in any business document or contract.

Business usually comes with some kind of paperwork, whether it’s a contract, a letter of agreement or even an instruction booklet. These vital documents are often written in language that is hard to understand for the average consumer, which is why there are specific Plain Language regulations in The Consumer Protection Act to prevent consumers signing documents they do not understand.

Protecting the consumer

The Act’s express purpose is to make sure consumers are not treated unfairly – intentionally or not. This means that using plain language is more crucial than ever. From now on, using obscure and confusing wording, especially in binding contracts, is not allowed. Quite simply, it’s illegal!
Too many consumers have landed in big trouble, especially financial trouble, because they haven’t understood what they’ve signed. Sometimes contracts are written in bloated, bureaucratic jargon just because that’s the way it has always been, or because the people writing the contracts don’t know any other way to do it. Often, though, unscrupulous businesses have used complicated language on purpose, as a way to trick consumers into paying for something they can’t afford, to sign away their rights, or to agree to unfair terms and conditions.

“For the purposes of this Act, a notice, document or visual representation is in plain language if it is reasonable to conclude that an ordinary consumer of the class of persons for whom the notice, document or visual representation is intended, with average literacy skills and minimal experience as a consumer of the relevant goods or services, could be expected to understand the content, significance, and import of the document without undue effort, having regard to:

The context, comprehensiveness and consistency of the notice, document or visual representation;

The organisation, form and style of the notice, document or visual representation;

The vocabulary, usage and sentence structure of the notice, document or visual representation; and

The use of any illustrations, examples, headings, or other aids to reading and understanding.”

This means that one won’t be permitted to word things so widely that they can be understood in several ways. The Act states that if there is any doubt about the meaning of certain words or terms and conditions, the benefit will go to the consumer.

Even advertising and marketing may no longer contain any ambiguity. Advertisements won’t be allowed to exaggerate and they will have to be easy to understand, fair and honest. The Act states that service providers will have to spell out everything in words that consumers can understand, alternatively the consumers have the right to full disclosure and information in plain and understandable language.

So, don’t delay. If you have a business document or contract that has been used for generations you might have to take a second look at it to edit or reword it so that it complies with the Consumer Protection Act.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

A seller’s protection under the “voetstoots” clause in a deed of sale for immovable property is not as “absolute” as some might think. It is still the seller’s duty to inform prospective purchasers about all latent (hidden) defects in a property. A seller’s failure to do so could cost the seller in the long run, as per a recent ruling by the Supreme Court of Appeal in Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 March 2013).

Examples of latent defects are a leaking roof or a faulty geyser. It basically includes any defects that cannot be seen with the naked eye. Prospective purchasers will, for example, not see water marks on a ceiling resulting from a leaking roof in the “dry” months.

In the abovementioned case the sellers failed to inform the purchasers about the true extent of the damage to the property’s roof. The sellers were aware of the fact that the roof leaked and had some repairs done to it to try and fix the problem. On closer inspection by specialists it was found that the cause of the leaks were twofold. Firstly, the wooden roof poles were inadequate to properly support the weight of the thatch roof and resulted in the gradual sagging of the roof. Secondly, the pitch of the property’s thatch roof was only 35 degrees and not 45 degrees as it should be, which would have at least ensured that rain water would run off the roof. The specialists testified that due to the pitch of the roof being 35 degrees, water ran into the roof and caused the thatch to rot more quickly. It was found that the initial repairs were therefore not sufficient to stop the roof from leaking in future. The purchasers only discovered this after registration of the property and the sellers had to fork out to replace the roof, as the problem could not be permanently solved by doing repairs to it. Even though the sellers were not aware of the bigger problem, namely the incorrect pitch of the roof, they were still held liable because they were aware that the repairs which they had done were not adequate.

On the other hand, patent defects are still the purchaser’s responsibility. Prospective purchasers cannot sit back and think that if any problems occur after occupation, the sellers will be held liable. A patent defect is defined as “one which will be apparent on an ordinary inspection”*. An example of a patent defect will be a crack in a wall which shows through the paint. It is a prospective purchaser’s duty to ask the sellers about such defects and get all guarantees from the sellers in writing.

It is clear that a mutual responsibility rests on sellers and purchasers regarding defects in a property. Sellers should be honest regarding latent defects and purchasers should be vigilant, when viewing a property, for any patent defects. It will be wise for sellers to rather negotiate a lower purchase price due to defects in a property, and to disclose them to the purchaser. Failing to be honest with the purchaser could have huge financial implications for the seller after registration of the property.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.